Inflation test, Iran escalation set up a volatile week ahead for commodity markets

Following the payrolls beat, that probability jumped to around 60% in favour of a quarter point hike, meaning next week's inflation prints now carry outsized weight ahead of the Fed's September 15-16 meeting. US jobs data likely to remain the dominant swing factor for gold and silver Overall bias remains sideways to bearish for MCX gold futures Washington now willing to escalate rather than de-escalate Strait of Hormuz tensions Did our AI summary help? Market Mastery Webinar by Vishal Malkan Find the weak links in your portfolio by Vishal Malkan Register for FREE Webinar Register for FREE Markets swung sharply this week ended September 4 as a blowout jobs report reset the Fed narrative just days after a Fed governor had tried to calm it down, while crude posted its strongest weekly gain since mid-July on a widening US-Iran conflict. The dollar closed 0.5% lower for the week but held above the 99, with the move driven by yen and shifting rate outlook. The yen firmed meaningfully after several Bank of Japan officials adopted a more hawkish tone ahead of the central bank's September 18 policy decision, strengthening conviction that a rate increase is likely this month. Domestically, the dollar was whipsawed by a shifting Fed narrative through the week. Chair Warsh's hawkish remarks at Jackson Hole had already lifted September hike expectations toward 60%, before Fed Governor Christopher Waller struck a more cautious note on Thursday, indicating he would support holding rates steady provided disinflation trends hold. That commentary pulled hike odds back down, easing yields and lifting equities through Thursday's session. The move reversed again on Friday, when a much stronger than expected August payrolls report, up 162,000 against a consensus near 56,000, alongside a sharp upward revision to July's initially weak print, pushed the dollar and yields higher and weighed on precious metals and equities into the close. Equities ended the week mixed and bullion finished mildly lower. Spot gold and silver closed a choppy week mildly lower at $4,430 an ounce and $66.2 an ounce, as the strong jobs data reinforced the view that the labour market has enough resilience to give the Fed room to tighten if inflation doesn't cooperate. Losses were limited by Thursday's rally, when gold jumped over 2% to settle above $4,470 and silver advanced to $67 on Waller's dovish remarks, before payrolls reversed part of that move. Gold & Silver Rates Yesterday Saturday, 05th September, 2026 Gold Rate in Mumbai Yesterday 10g of 24K gold in Mumbai ₹ 152,960 10g of 22K gold in Mumbai ₹ 140,110 View more Saturday, 05th September, 2026 Silver Rate in Mumbai Yesterday 10g silver in Mumbai ₹ 2,320 1kg silver in Mumbai ₹ 232,825 View more Show Gold futures corrected sharply from recent highs and are now facing pressure below Rs 1,57,075 per 10 gram, with the bearish Supertrend indicating weakening momentum. Support is seen at Rs 1,49,600, followed by Rs 1,48,000, while resistance stands at Rs 1,57,075 and Rs 1,60,500. The overall bias remains sideways to bearish; a break below Rs 1,49,600 may trigger further downside testing Rs 1,48,000 level, while a move above Rs 1,57,075 could improve the outlook. Expected trading range: Rs 1,48,000–1,57,075. Crude closed the week up more than 9%, its strongest weekly gain since mid-July, with Brent near $96 and WTI above $91. Prices were driven by a widening US-Iran conflict even as vessel traffic through the Strait of Hormuz remained well below normal levels. Iranian strikes on Jordan, Kuwait and Bahrain broadened the conflict's footprint through the week, while Israel's defense minister has threatened further action against Iranian energy infrastructure. Tensions escalated again into the weekend, when the US said Iran's Revolutionary Guard fired ballistic missiles at a US aircraft carrier and destroyer, both of which evaded the attack. The US responded by disabling two Iranian oil tankers and destroying a third, the first time Washington has targeted Iranian tankers directly in retaliation rather than solely to enforce its existing blockade. Base metals ended the week firmer, with aluminium and zinc leading gains near $3,293 a ton and $3,945 a ton respectively, while copper held near $14,415. The strength was underpinned by tightening physical fundamentals, with copper benefiting from declining inventories outside the US, weaker Chilean and Chinese production and continued tariff driven shipments into the US. Zinc remained the strongest market as mine disruptions, historically low LME inventories and deeply negative treatment charges pointed to increasingly constrained concentrate availability. Aluminium stayed supported by tight inventories and ongoing West Asian disruptions, though rising Chinese exports and potential capacity restarts are beginning to offer some relief. Going into the jobs data, September hike odds were sitting close to even. Following the payrolls beat, that probability jumped to around 60% in favour of a quarter point hike, meaning next week's inflation prints now carry outsized weight ahead of the Fed's September 15-16 meeting. For gold and silver, that data, not the Iran conflict, is likely to remain the dominant swing factor, since yields and Fed pricing have driven most of the week's moves in both metals. Crude is the exception. Trump had earlier signalled the prior round of strikes would be short lived, but the weekend's direct tanker for tanker retaliation suggests Washington is now willing to escalate rather than de-escalate, raising the odds of a further tit for tat cycle rather than a cooling one, and keeping the risk premium the dominant driver for oil.